Life Is Unfair Bay Area Founders Raise at Higher Valuations

Author:

Peter Walker

Published date:

August 12, 2025

SF companies consistently raise at higher valuations—but companies that raised at absurd 2021 SF prices often faced brutal corrections in subsequent rounds.

Life is unfair and so are startups. If you aren't in Silicon Valley, you'll likely raise at a lower valuation.

Upfront - this is not always a bad thing! It's very possible that companies in SF are currently raising at rather absurd valuations that will set them up for down rounds and rough nights in a few years. Just look at the recent 2021 high-flyers for examples.

The more general point is there is no national market for startups. VCs operate in relation to their deal access, which is typically gated by proximity to some degree. Founders are likewise restricted by local fundraising conditions.

We cover Seed, Series A, and Series B valuations and cash raised for software startups in the graphic below, but here's Series A data as a starting point:

𝗪𝗲𝘀𝘁

Median post-money valuation at Series A: $70M
Median cash raised at A: $13.1M

𝗡𝗼𝗿𝘁𝗵𝗲𝗮𝘀𝘁

Median post-money valuation at Series A: $62.3M
Median cash raised at A: $12M

𝗦𝗼𝘂𝘁𝗵

Median post-money valuation at Series A: $50M
Median cash raised at A: $8.4M

𝗠𝗶𝗱𝘄𝗲𝘀𝘁

Median post-money valuation at Series A: $52.3M
Median cash raised at A: $9.3M

So, why the major gaps?

Competition for AI-native companies is frenzied and the white-hot center is Silicon Valley.
Investor appetite for software companies not utilizing AI is mild at best, which leads to more competition for the "in-vogue" businesses.

Fundraise with open eyes, friends.

Author: Peter Walker

Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.